The Factor Analysis Of RMB Settlement In Cross-border Trade

China has become the world’s second largest economy, with a strong economy and significant international standing, but the international status of the RMB is not like that; outbreak of the financial crisis revealed the shortcomings of the international monetary system, voice to reform is rising. In this context, the internationalization of RMB is inevitable. As the first step in internationalization of RMB, RMB settlement in cross-border trade began to run in July 2009, to understand its development,analyze the problems in its development, research factors affecting the development are of a very important practical significance. Based on the currency selection theory of trade settlement, this passage has summarized the developments of RMB settlement in cross-border trade and made realistic analysis and empirical analysis of its influencing factors, in order to propose policy recommendations to further promote its development.Paper first reviews some of the literature, according to trade settlement currency selection theory, then analysis the development conditions, the status and the problems of the RMB settlement in cross-border trade, then on this basis, focusing on the theoretical level reveals the influence factors of the development of RMB settlement in cross-border trade, through co-integration test, variance decomposition explore the dynamic relationship between the various factors from the empirical point of view, get the following conclusions:(1) the development of China’s current level of trade, the stability of RMB, RMB offshore market development and product heterogeneity are the major factors affecting the RMB settlement of cross-border trade;(2) There is the long-term equilibrium relationship between RMB settlement in cross-border trade and those four factors;(3)Through the analysis, the influence of trade development on the RMB settlement is not available, then this passage give some reasons to explain it.(4) In those three factors, the development level of RMB offshore market has the greatest impact on cross-border trade RMB settlement; then the stability of the RMB exchange rate is the second one, its impact on the RMB settlement has a reverse effect; and the intensity of intra-industry trade is relatively small. Finally, this paper analyzes factors of reality and empirical results give policy recommendations to promote the development of RMB settlement.